Continuous data monitoring - friend or foe?
May 18, 2021
CCTV has made us familiar with the concept of being watched 24/7. Some find it intrusive, others find it provides a sense of security. But what about being monitored through your organisation’s data? Governments around the world are turning to technology to ‘watch’ your organisation through continuous data monitoring. And businesses need to embrace it to maximise the benefits and minimise the risks.
In a finance function, continuous data monitoring is exactly what it says. It’s a means of reviewing the data going into a system, checking it and using analytics to gain valuable business insights. All in real time. There is no month end pain - words that many working in a finance role greet with rolling eyes and a loud sigh.
Month end traditionally means data cleansing, correcting, manipulating and reconciling. Plus long hours, complex spreadsheets, summaries and a lot of frustration along the way. However a few, usually people working in larger organisations, will have an experience more akin to, “Month end? What’s the big deal?”
Behind the two contrasting responses lies an acceptance of the need for transformation. There are multiple drivers:
- Governments are becoming more sophisticated in how they collect and combine financial data from different sources and apply their own algorithms and analytics to tell a story.
- Tax authorities are increasingly requiring data to be provided in real time.
- The growing transparency agenda where news platforms continue to highlight perceived underpayments of tax.
- Challenges of unreliable data tax departments have to work with.
- C-suite calls for meaningful business insights, greater efficiencies and smarter working.
It’s no surprise that companies are having to rethink how their finance functions operate. Being able to continuously monitor tax data, to look for and correct errors in feeding business processes in real time is becoming a fundamental capability for any business. This is exactly what more and more leading businesses are doing...and enjoying the many benefits that come with that.
Evaluating tax relevant business data in real time enables a tax function to apply tax sensitive rules to that data and correct errors as they emerge. Alongside the right processes and controls, this brings greater confidence in filing positions and tax authority risk ratings. It also contributes to cost efficiencies, enhanced confidence in transparency and ultimately reputation as your data tells the right story. For those battling with traditional month ends, continuous data monitoring frees them from that grind. It opens up time to focus on complex technical issues and analysis of business relevant insights. Not only are your highly skilled people doing the right level of work, they’re happier too.
Adopting a continuous data monitoring approach isn’t an easy step to take. It’s not just having the right technology, you’ll need experience and a little expert help to build an ERP to meet the needs of all finance functions, including tax. A great starting point is to carry out a tax data quality assessment. This will highlight any compliance inefficiencies, value loss and control failures. It can also help a tax function define its data, process and system roadmaps and build an operating model to continuously monitor tax data. What that looks like depends on the organisation, but can range from getting the most out of existing technology to implement continuous monitoring, to providing managed services to monitor data for them.
Ultimately, continuous data monitoring is a win, win for business. Making data your friend means getting it to work beneficially for your organisation, leaving you to sleep well at night without worrying what story it’s telling the government.